The U.S. Department of Agriculture is updating its farm loan programs to better support current borrowers, including historically underserved producers.
These improvements are part of USDA’s commitment to increase equity in all programs, including farm loans that provide important access to capital for covering operating expenses and purchasing land and equipment, according to a news release from the USDA Farm Service Agency in Bangor.
“USDA remains committed to examining barriers faced by all borrowers, especially those in economic distress, new and beginning, socially disadvantaged or otherwise underserved producers,” said Zach Ducheneaux, administrator of USDA’s Farm Service Agency. “We recognize loan making and servicing activities are critical for producers, especially in tough times. This improvement to our farm loan programs recognizes the needs of producers and more importantly enacts equitable relief provisions to ensure they get a fair shake.”
The 2018 Farm Bill authorized agency to provide equitable relief to certain direct loan borrowers, who are non-compliant with program requirements due to good faith reliance on a material action of, advice of, or non-action from an FSA official. Previously, borrowers may have been required to immediately repay the loan or convert it to a non-program loan with higher interest rates, less favorable terms, and limited loan servicing.
Now, the agency has additional flexibilities to assist borrowers in such situations. If the agency provided incorrect guidance to an existing direct loan borrower, the agency may provide equitable relief to that borrower. FSA may assist borrowers by allowing them to keep their loans at current rates or other terms received in association with the loan which was determined to be noncompliant, or the borrower may receive other equitable relief for the loan as the agency determines to be appropriate.
USDA encourages producers to reach out to their local loan officials to ensure they fully understand the wide range of loan and servicing options available that can assist them in starting, expanding or maintaining their operation.
Additional information on these changes is available in the March 8 rule at federalregister.gov.
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